Drinking behavior is likely to be influenced by macroeconomic conditions. Local or national recessions reduce job security, increase unemployment, and decrease earnings. Declining incomes diminish the ability of individuals to purchase alcohol, which reduces drinking. On the other hand, elevated unemployment and job security are likely to increase stress. If alcohol is used as self-medication, consumption may therefore rise during economic downturns. These cyclical changes are likely to be most pronounced for groups hardest hit by recessions. The effects of microeconomic factors, particularly taxes and minimum drinking' ages, on alcohol use have been extensively researched. Much less attention has been paid to the role of the macroeconomy. This study will help to remedy this imbalance by addressing three specific questions: 1) What impact do local and national economic conditions have on alcohol use and related problems? 2) Do these effects differ across demographic groups and for particular types of alcohol problems? 3) Has the failure of previous studies to adequately control for economic conditions led to biased estimates of the economic costs of alcohol use or of the effects of changes in the legal minimum drinking age, liquor taxes, and alcohol regulations? Pooled time-series cross-sectional data will be examined for the 48 contiguous states and the 1962-88 time period. Dependent variables will include a measure of alcohol consumption and two indicators of problem drinking (motor vehicle fatalities and cirrhosis mortality rates). This study will supply new information on the costs and benefits of macroeconomic stabilization policies, indicate how alcohol prevention and treatment benefits should vary with the business cycle and local economic conditions, and modify our understanding of how liquor taxes and regulations affect drinking behavior.